Bitcoin Price Levels to Watch After Cryptocurrency Hits First Record High Since May
Key Takeaways
- Bitcoin powered past $112,000 to another record high yesterday, its first since late May, before consolidating in early trade on Thursday.
- Bitcoin’s price nudged above the top trendline of a descending channel Wednesday, paving the way for a continuation move higher.
- The measuring principle projects an upside target if $146,400.
- Investors should watch major support levels on bitcoin’s chart around $107,000 and $100,000.
Bitcoin (BTCUSD) powered past $112,000 to another record high yesterday, its first since late May, before consolidating in early trade on Thursday.
In recent months, the cryptocurrency has received a boost from more companies adding it to their corporate treasuries and lawmakers working towards passing pro-crypto legislation.
Bitcoin trades nearly 50% above its early April low and has gained 19% on the year, roughly matching the returns of Magnificent Seven members, Nvidia (NVDA) and Microsoft (MSFT) over the same period.
Below, we take a closer look at the technicals in bitcoin’s chart and identify major price levels worth watching out for.
Descending Channel Breakout
Bitcoin’s price nudged above the top trendline of a descending channel on Wednesday, paving the way for a continuation move higher. Moreover, the relative strength index (RSI) confirms bullish momentum and remains below overbought levels, providing ample room for the digital asset to move into price discovery mode.
However, it’s worth pointing out that trading volume continues to dwindle on Coinbase (COIN), the largest U.S.-based crypto exchange, suggesting that larger market participants, such as institutional investors, may be accumulating the asset through spot bitcoin exchange-traded funds (ETFs) rather than exchanges.
Let’s use technical analysis to project a potential upside target on bitcoin’s chart and also locate several major price levels where the cryptocurrency could find support.
Chart-Based Upside Target
Investors can project an upside target in bitcoin by using the measuring principle, a technique that analyzes price swings on the chart to forecast future price levels.
When applying the analysis, we calculate the distance of the cryptocurrency’s uptrend that preceded the descending channel and add that amount to Wednesday’s breakout point. This projects a target of $146,400 ($37,600 + $108,800), implying 32% upside from bitcoin’s current trading levels.
Major Support Levels to Watch
During retracements, investors should initially watch the $107,000 level. This point, currently situated just below the descending channel’s upper trendline, could provide support near the 50-day moving average and prominent December and January peaks.
Finally, the bulls’ failure to successfully defend this major level opens the door for a retest or lower support around $100,000. Investors could look for entry points in this region near the descending channel’s lower trendline, which also closely corresponds with a range of trading activity on the chart stretching back to last November.
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As of the date this article was written, the author does not own any of the above securities.